FIRST LOAN MODIFICATION AGREEMENT

Exhibit 10.1

FIRST LOAN MODIFICATION AGREEMENT

This First Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of April 26th, 2013, by and between SILICON VALLEY BANK, a California corporation, with its principal place of business at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 and with a loan production office located at 0000 XX Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxx 00000 (“Bank”) and JIVE SOFTWARE, INC., a Delaware corporation, with its principal place of business at 000 XX Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000 (“Borrower”).

1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of May 23, 2012, evidenced by, among other documents, a certain Second Amended and Restated Loan and Security Agreement dated as of May 23, 2012, between Borrower and Bank (as amended, the “Loan Agreement”). Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.

2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by, among other property, the Collateral (together with any other collateral security granted to Bank, the “Security Documents”). Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations shall be referred to as the “Existing Loan Documents”.

3. DESCRIPTION OF CHANGE IN TERMS.

A. Modifications to Loan Agreement.

1 The Loan Agreement shall be amended by deleting the following text, appearing in Section 6.7 thereof:

“        (a) Adjusted EBITDA. Adjusted EBITDA of (i) ($20,000,000.00) for the period beginning on January 1, 2012 and ending on the last day of the fiscal quarter ending on each of March 31, 2012, June 30, 2012, September 30, 2012 and December 31, 2012, and (ii) $0.00 for the period beginning on January 1, 2013 and ending on the last day of the fiscal quarter ending on each of March 31, 2013, June 30, 2013, September 30, 2013 and December 31, 2013;

(b) Adjusted Quick Ratio. An Adjusted Quick Ratio of at least (i) at the end of each fiscal quarter occurring on or prior to December 31, 2013, 2.0 to 1.0, and (ii) at the end of each fiscal quarter commencing with the fiscal quarter ending March 31, 2014, 1.50 to 1.0;”

and inserting in lieu thereof the following:

“        (a) Adjusted EBITDA/Modified EBITDA. (i) Adjusted EBITDA of ($20,000,000.00) for the period beginning on January 1, 2012 and ending on the last day of the fiscal quarter ending on each of March 31, 2012, June 30, 2012, September 30, 2012 and December 31, 2012, and (ii) Modified EBITDA of ($35,000,000.00) for the period beginning on January 1, 2013 and ending on the last day of the fiscal quarter ending on each of March 31, 2013, June 30, 2013, September 30, 2013 and December 31, 2013;

(b) Adjusted Quick Ratio. An Adjusted Quick Ratio of at least 2.0 to 1.0 at the end of each fiscal quarter;”

2 The Loan Agreement shall be amended by inserting the following new definition, to appear alphabetically in Section 13.1 thereof:

“         “Modified EBITDA” shall mean, for any period of determination, determined on a consolidated basis, (a) Borrower’s Net Income plus (b) to the extent deducted in the calculation of Borrower’s Net Income, Interest Expense, income tax expense, depreciation expense and amortization expense, plus (c) other non-recurring expenses or charges that do not represent a cash item in such period or any future period, including stock based compensation and any purchase accounting adjustments, plus (d) impairment of goodwill, intangible and tangible assets approved by Bank on a case-by-case basis, and plus (e) any other adjustments approved by Bank on a case-by-case basis. For the purposes of calculating Modified EBITDA for purposes of calculating the financial covenant set forth in Section 6.7(a), if at any time during the period for which such calculation is being made, Borrower or any of its Subsidiaries shall have made a Permitted Acquisition, Modified EBITDA for such period shall be calculated on a Pro Forma Basis.”

3 The Loan Agreement shall be amended by deleting the Compliance Certificate attached as Exhibit D thereto and inserting in lieu thereof the Compliance Certificate attached as Schedule 1 hereto.

B. Waiver. Bank hereby waives Borrower’s existing default under the Loan Agreement by virtue of Borrower’s failure to comply with the financial covenant set forth in Section 6.7(a) thereof (relative to the requirement that Borrower maintain a certain Adjusted EBITDA, as required prior to this Loan Modification Agreement) as of the last day of the fiscal quarter ended March 31, 2013. Bank’s waiver of Borrower’s compliance with such financial covenant shall apply only to the foregoing specific period.

4. FEES AND EXPENSES. Borrower shall reimburse Bank for all legal fees and expenses incurred in connection with this amendment to the Existing Loan Documents.

5. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above.

6. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security or other collateral granted to Bank, and confirms that the indebtedness secured thereby includes, without limitation, the Obligations.

7. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.

8. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly modified pursuant to this Loan Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and effect. Bank’s agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any future modifications to the Obligations. Nothing in this Loan Modification Agreement shall constitute a satisfaction of the Obligations. It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing. No maker will be released by virtue of this Loan Modification Agreement.

9. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower and Bank.

[The remainder of this page is intentionally left blank]

This Loan Modification Agreement is executed as of the date first written above.

BORROWER:						BANK:
JIVE SOFTWARE, INC.						SILICON VALLEY BANK
By:		/s/ Xxxxx XxXxxxx				By:		/s/ Xxxx Xxxxxxxx
Name:		Xxxxx XxXxxxx				Name:		Xxxx Xxxxxxxx
Title:		Chief Financial Officer				Title:		Vice President

SCHEDULE 1

EXHIBIT D

COMPLIANCE CERTIFICATE

Date:                                           

TO: SILICON VALLEY BANK

FROM: JIVE SOFTWARE, INC.

The undersigned authorized officer of JIVE SOFTWARE, INC. (“Borrower”) certifies that under the terms and conditions of the Second Amended and Restated Loan and Security Agreement between Borrower and Bank (the “Agreement”):

(1) Borrower is in complete compliance for the period ending                      with all required covenants except as noted below; (2) there are no Events of Default except as noted below; (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; (4) Borrower, and each of its Subsidiaries, have timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.8 of the Agreement; and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank.

Attached are the required documents supporting the certification. The undersigned certifies that the attached financial statements are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

Please indicate compliance status by circling Yes/No under “Complies” column.

Reporting Covenant		Required		Complies
Quarterly consolidating financial statements		Quarterly within 45 days		Yes     No
Annual financial statement (CPA Audited)		FYE within 150 days		Yes     No
10-Q, 10-K and 8-K		Within 5 days after filing with SEC		Yes     No
Quarterly Compliance Certificate		Contemporaneously with delivery of the 10-Q and 10-K		Yes     No

Financial Covenant		Required		Actual				Complies
Maintain as of the last day of each applicable quarter:
Modified EBITDA (tested in 2013)		($35,000,000.00)		$				Yes    No    N/A
Adjusted Quick Ratio		> 2.0 :1.0			:			Yes     No
Fixed Charge Coverage Ratio (tested in 2014 and thereafter)		> 1.50 : 1.0			:			Yes     No      N/A
Total Leverage Ratio (tested in 2014 and thereafter)		< 2.50 :1.0			:			Yes     No      N/A

Performance Pricing/Unused Revolving Line Margin

Required

Actual

Eligible?

Adjusted Quick Ratio (quarterly)

³

2.75:1.0

:1.0

Yes  No

The following financial covenant analyses and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.

The following are the exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions to note.”)

		BANK USE ONLY
BORROWER:
		Received by:
JIVE SOFTWARE, INC.		AUTHORIZED SIGNER
		Date:
By:
Name:		Verified:
Title:		AUTHORIZED SIGNER
		Date:
		Compliance Status:                     Yes    No

Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan Agreement shall govern.

Dated:                                         

I. Modified EBITDA (Section 6.7(a)) (tested quarterly)

Required: Modified EBITDA on a cumulative basis for such calendar year of at least ($35,000,000.00) for the calendar year ending December 31, 2013

A.		Net Income		$
B.		To the extent included in the determination of earnings for such period
		1. Interest Expense		$
		2. income tax expense		$
		3. depreciation expense		$
		4. amortization expense		$
		5. The sum of lines 1 through 4		$
C.		Non-recurring expenses or charges that do not represent a cash item in such period or any future period, including stock based compensation and any purchase accounting adjustments		$
D.		Impairment of goodwill, intangible and tangible assets previously approved by Bank		$
E.		Other adjustments approved by Bank on a case-by-case basis		$
F.		Modified EBITDA (line A plus line B.5 plus line C plus line D plus line E)		$

Is line F equal to or greater than the amount applicable above?

                     No, not in compliance                      Yes, in  compliance

II. Adjusted Quick Ratio (Section 6.7(b) (tested quarterly))

Required: 2.0 to 1.0

A.		Aggregate value of the unrestricted cash and Cash Equivalents of Borrower maintained with Bank		$
B.		Aggregate value of unrestricted and unencumbered cash or Cash Equivalents deposited with or invested through a third party in investments with maturities of fewer than twelve (12) months so long as a Control Agreement satisfactory to Bank has been executed and delivered with respect to such deposits or investments		$
C.		Aggregate value of the net billed accounts receivable of Borrower		$
D.		Quick Assets (the sum of lines A through C)		$
E.		Aggregate value of Loan Obligations to Bank		$
F.		Aggregate value of liabilities that should, under GAAP, be classified as liabilities on Borrower’s consolidated balance sheet, including all Indebtedness, and not otherwise reflected in line E above that matures within one (1) year		$
G.		Current Liabilities (the sum of lines E and F)		$
H.		Current portion of Deferred Revenue		$
I.		Line G minus line H		$
J.		Adjusted Quick Ratio (line D divided by line I)

Is line J equal to or greater than the amount applicable above?

                     No, not in compliance                      Yes, in  compliance

III. Fixed Charge Coverage Ratio (Section 6.7(c)) (tested quarterly, starting in 2014)

Required: 1.50 to 1.0

* All values are for the immediately preceding 12 month period unless otherwise specified

A.		Net Income		$
B.		To the extent included in the determination of earnings for such period
		1. Interest Expense		$
		2. income tax expense		$
		3. depreciation expense		$
		4. amortization expense		$
		5. The sum of lines 1 through 4		$

C.		Non-recurring expenses or charges that do not represent a cash item in such period or any future period, including stock based compensation and any purchase accounting adjustments		$
D.		Impairment of goodwill, intangible and tangible assets previously approved by Bank		$
E.		Other adjustments approved by Bank on a case-by-case basis		$
F.		Any increase in Deferred Revenue from the prior period		$
G.		Any decrease in Deferred Revenue from the prior period		$
H.		EBITDA (line A plus line B.5 plus line C plus line D plus line E plus line F minus line G)		$
I.		Consolidated Interest Expense and Taxes		$
J.		The sum of all principal payments due for immediately following 12 month period on Funded Debt		$
K.		Fixed Charge Coverage Ratio (line H divided by (the sum of lines I and line J)		:1.0

Is line K equal to or greater than 1.50 to 1.0?

                     No, not in compliance                      Yes, in  compliance

IV. Total Leverage Ratio (Section 6.7(d)) (tested quarterly, starting in 2014)

Required: Less than or equal to 2.50 to 1.0

* The values in B, C and D below are for the immediately preceding 12 month period

A.		Funded Debt (all (a) borrowed money (whether direct or indirect) incurred, assumed, or guaranteed, plus (b) all capital lease obligations, plus (c) all synthetic lease obligations, plus (d) all obligations, contingent or otherwise, under any letters of credit, plus (e) all obligations for the deferred purchase price of capital assets, plus (f) all obligations under conditional sales agreements; provided, however, Funded Debt shall not include (i) Borrower’s obligations under operating leases, and (ii) Borrower’s obligations under guarantees provided in respect of operating leases of Borrower’s Subsidiaries), but excluding the principal amount of any Subordinated Debt		$
B.		Net Income		$
C.		To the extent included in the determination of earnings for such period
		1. Interest Expense		$
		2. income tax expense		$
		3. depreciation expense		$
		4. amortization expense		$
		5. The sum of lines 1 through 4		$
D.		Non-recurring expenses or charges that do not represent a cash item in such period or any future period, including stock based compensation and any purchase accounting adjustments		$
E.		Impairment of goodwill, intangible and tangible assets previously approved by Bank		$

F.		Other adjustments approved by Bank on a case-by-case basis		$
G.		Any increase in Deferred Revenue from the prior period		$
H.		Any decrease in Deferred Revenue from the prior period		$
I.		EBITDA (line B plus line C.5 plus line D plus line E plus line F plus line G minus line H)		$
J.		Total Leverage Ratio (line A divided by line I)		:1.0

Is line J less than or equal to 2.50 to 1.0?

                     No, not in compliance                      Yes, in  compliance